MESSRS QURESHI VEGETABLE GHEE MILLS LTD. VS COMMISSIONER OF INCOME-TAX ARID 3 OTHERS
2002 P T D 399
[Supreme Court (AJ&K)]
Present: Basharat Ahmad Shaikh and Muhammad Yunus Surakhvi, JJ
Messrs QURESHI VEGETABLE GHEE MILLS LTD.
Versus
COMMISSIONER OF INCOME-TAX arid 3 others
Civil Appeals Nos. 128 and 129 of 1999, decided on 28/04/2000.
(On appeal from the judgment of the High Court, dated 17-9-1999 in Income Tax Appeals Nos.3 and 4 of 1998).
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss.135(8), 136 & 137---Appeal before High Court ---Limitation-- Appeals filed after more than four years from passing of orders by the Income-tax Appellate Tribunal, were dismissed by the High Court being barred by time---Contentions of the appellants/assessees were that limitation was to run from the date of communication of order of the Income-tax Tribunal to them under S.135(8) of Income Tax Ordinance, 1979, and as no order was communicated according to law, appeal filed by them after obtaining copies of said orders at their own cost, were within time---Contentions were repelled on the ground that one of the Directors of the assessee-Company appeared before the Incom-tax Officer in connection with recovery proceedings and acquired knowledge that Appellate Tribunal had dismissed the appeals and limitation would start from the date of knowledge in view of settled law that where a judgment had not been conveyed to a party, the limitation would start running from the date of knowledge---Validity---Contention that unless result of the appeal was communicated limitation would not start running, could not be accepted---High Court had rightly dismissed appeals being barred by time holding that appellants, despite having knowledge of dismissal of their appeals by the Appellate Tribunal had filed appeals after considerable delay.
(b) Income-tax---
---Limitation---Starting point---Judgment not conveyed---Where a eyed, limitation would start from date of knowledge.
Muhammad Rafique Dar, Advocate for Appellant.
Ch. Muhammad Afzal, Advocate for Respondents.
Date of hearing: 28th February, 2000.
JUDGMENT
BASHARAT AHMAD SHAIKH, J.---Two appeals filed by Qureshi Vegetable Ghee Mills Limited before the High Court under section 136 of the Income Tax Ordinance have been dismissed on the ground that the appeals were time-barred. The said company has filed above titled two appeals under section 137 of the Income Tax Ordinance to challenge the two decisions of the High Court.
2. Appeals before the High Court were filed on 24th June, 1998 to challenge the orders passed by the. Income-tax Appellate Tribunal on 2nd October 1994 against assessment orders for the year 1988-89 and year 1989-90. In the appeals' filed before the High Court limitation was explained as follows:---
"The Appellate decision of Tribunal was never communicated to the appellant as required under section 135(8) of the Ordinance and the appeal is being filed after obtaining copies at own cost. Hence the appeal is in time."
Section 135(8) is as follows:---
"The Appellate Tribunal shall communicate its order to the assessee and to the Commissioner."
3. It was contended before the High Court that limitation was to run from the date of communication under section 135(8). Under section 136 limitation for filing appeal to the High Court was sixty days from the communication mentioned in section 135(8).
4. This plea has been rejected by the High Court on the ground that one of the Directors of Qureshi Ghee Mills Limited appeared before the Income-tax Officer on 22nd January, 1998 in connection with recovery proceedings and thus acquired the knowledge that the Appellate Tribunal had dismissed the appeal on 2nd October, 1994 and limitation in any case started from the date of knowledge as aforesaid.
5. Confronted with the situation the learned counsel took the following stand before the High Court:---
`The learned counsel for the appellants was confronted to explain whether on 22nd January, 1998, when he appeared before the Income-tax Officer then he was retaining the knowledge of the impugned judgment. The learned Counsel submitted that no doubt he was* retaining the knowledge but the limitation will run from the date when the notice is served upon the appellants. He submitted that uptil now no notice was served upon the appellants, therefore, the appeals are within time."
6. In the appeal filed in this Court it is stated as follows:---
"That nobody had even alleged the appearance of appellant or his counsel before the Income-tax Officer hence the question of the appearance of the appellant before the Income-tax Officer and the admission of the counsel of the appellant does not arise. Actually the Honourable High Court due to misunderstandings and hurry could not understand the difference between Tax Recovery Officer and Income-tax Officer and took both the above Officers as one and the same officer. Actually it was the case of the respondents that the appellant appeared before the Tax Recovery Officer and it was nobody's case that the appellant ever appeared before the Income-tax Officer. ",
7. It follows that the company was duly represented before the Tax Recovery Officer on 22nd January, 1998. The difference highlighted in the above extracted ground does-not advance the company's case because if knowledge was gained by appearing before the Recovery Officer and not the Income-tax Officer it would not make any difference. However, it was contended by Mr. Muhammad Rafique Dar that the Appellate Tribunal wrongly assumed that the recovery proceedings mentioned above during which the appellant-company is said to have gained knowledge were initiated as a result of the judgment of 2nd October, 1994. In our view this argument does not have any weight because presumption wised by the High Court has not been rebutted, by the appellant by producing any document to the contrary. This aspect of the matter assumes greater importance for the reason that it is the case of the appellant-company that in the previous assessment the company had been assessed to nil income. Orders annexures A and B passed on 28th November, 1989 and 11th April, 1990, filed in the High Court by the appellant-company, show that nil assessment was completed on the aforementioned dates. According to the case of the company itself it is about four years later that the concerned authorities changed mind and made assessments creating income-tax liability for the same period in respect of which the two orders annexure A and annexure B had been passed. It means that since 1990 no income-tax was outstanding against the company. Therefore in this view of the matter the High Court rightly presumed that the recovery proceedings were being carried out in 1998 as a result of the assessment made on 2nd October, 1994. It follows that the High Court rightly reached the conclusion that the appellant-company had become aware that the appeal filed before Income-tax Tribunal by the company had been dismissed.
8. It is well-settled by now that where a judgment has not been conveyed to a party limitation starts running from the date of knowledge. The proposition canvassed on behalf of the appellant-company is `that unless result of the appeal is communicated limitation would not start running cannot be accepted because then it would mean that it will not be possible to file an appeal if the Tribunal does not intimate the result to the party. In that case even the appellant's appeal before the High Court was defective because it has not been filed on the basis of intimation but on the basis of knowledge.
9. It was contended by Ch. Muhammad Afzal, the learned counsel for the Income-tax Department, that in the appeal filed by the appellant company before the High Court there was no averment that all the Directors of the company or, for that matter, the company were ignorant about the adverse decision of the Income-tax Appellate Tribunal, dated 26th February, 1995 till appeal was filed in the High Court on 24th June, 1998. The intervening period comes to more than three years. We have gone through the memorandum of appeal filed before the High Court and find that the submission made by Ch. Muhammad Afzal is correct. There is no averment in the memorandum that the decision of the Tribunal was not in the knowledge of the Directors of the company., Consequently there was no affidavit on this point. As already stated, on behalf of the company the plea taken in the memorandum of appeal was that the appeal was within time because decision of the Tribunal was not communicated to the appellant as required under section 135(8).
10. It may be mentioned that the learned counsel for respondent Ch Muhammad Afzal, raised a preliminary objection about the maintainability of the certificated appeal on the ground that the certificate issued by the High Court that it was a fit case for appeal to the Supreme Court was defective for the following three reasons:---
(i) no notice was given to the respondents before issuing the certificate as is required under Order 45 rule 3(2) of the Civil Procedure Code which has been made applicable to appeal before the Supreme Court under section 137 of the Income Tax Ordinance;
(ii)no law point was involved;
(iii)the reason recorded by the High Court that limitation was a mixed question of law was not a ground in the eye of law."
We are not adverting to this objection in view of the finding that appeal before the High Court was clearly barred by time.
For the foregoing reasons both the appeals are dismissed.
H.B.T./M.A.K./226/SC(AJK) Appeals dismissed.